Officials who run the hall, where the pageant has been held for the last 84 years, voted unanimously Thursday to allow organizers of the pageant to break their contract with the venue.

The decision came after a surprise announcement earlier in the day from the organizers of the pageant, who asked the Atlantic City Convention & Visitors Authority’s board of directors to release the Miss America Organization from its contract because of financial troubles.

The board voted 7-0 to allow Miss America out of the contract. Officials said they didn’t see the point in prolonging the money woes plaguing Miss America, which is in dire financial condition and last year lost its broadcast network TV contract.

“It’s a sad day,” said James Whelan, a former city mayor who serves on the authority’s board. “We felt we really didn’t have any choice but to grant their request.”

Miss America CEO Art McMaster told the authority’s board members the pageant cannot survive if it continues in the hall, a Depression-era landmark that has hosted the annual event since 1940.
Destination unknown
McMaster said he had no destination in mind for the pageant, but said the high cost of operating in Atlantic City meant a drain on the organization that would put it out of operation. Miss America officials did not comment immediately after the vote, but scheduled an afternoon news conference.

Jeffrey Vasser, executive director of the authority, said legal reasons prevented the pageant from negotiating with a potential new host while the organization was still bound by its contract for two more years in Boardwalk Hall.

“The governor is sorry to see the Miss America pageant move on. While it was a great event for New Jersey, the organization asked to be released from their contract, and we respect their wishes,” said Sean Darcy, a spokesman for Codey.

High labor costs affiliated with making the hall TV ready have always been a drag on finances, according to pageant officials. Their contract with the hall expires in 2007.
Loss of TV contract sealed fate
McMaster, who took over the ailing nonprofit that runs Miss America in 2004, earlier in the day said the loss of millions of dollars in revenue from the pageant’s TV contract had forced the organization’s hand.

“I don’t think survivability is out there if we stay in Atlantic City,” he said.

The convention authority had given Miss America a $720,000 annual subsidy, but McMaster said the pageant still operates at a $500,000 loss each time it holds the event in the hall because of high production costs for the telecast itself.

In 2003, $5.6 million of its $6.9 million in revenue came from ABC, according to its tax return.

McMaster said Miss America can have its production expenses covered, and also receive $1 million or more by other would-be host cities. But he said the pageant hasn’t been actively looking and doesn’t have a place in mind.

Next stop, Nashville?
Under a TV deal with country music channel CMT that was announced in June, this year’s Miss America pageant was moved from its typical autumn slot to January. But neither the pageant nor the network said where the next pageant will be held, fueling worries that Atlantic City’s signature event would head for Nashville, Tenn., where CMT is headquartered.

Pageant officials at the time said they had no plans to leave Atlantic City.

Before the vote, authority members and residents at the meeting Thursday reacted coolly to the request.

“There’s been too much put into this program by this community through the years to allow you to just walk away,” said Pinky Kravitz, a local radio talk show host who attended the meeting.

Authority members wondered whether the pageant would be able to right its financial ship by moving elsewhere. McMaster said it could. He also suggested an arrangement similar to that of the Super Bowl, where the pageant would move from city to city each year, and potentially increase interest and viewership.